Fernando García Álvarez joined the 2016 edition of the TowerXchange Meetup Americas and spoke up about Entel’s expectations with regards to their relationship with towercos and the outsourcing of site deployments. In this exclusive interview, he shared with TowerXchange what has changed since 2016 with regards to Entel’s impressive growth, current and desired relationship with towercos as well as the improvements in terms of competition the MNO has brought to the Peruvian market.
TowerXchange: Please introduce yourself and your role within Entel Peru.
Fernando García Álvarez, Gerente de Construcción e Infraestructura de Red, Entel Perú:
In Entel Peru, I head the Deployment of Network Infrastructure department at a national level, for both outdoor and indoor, as well as the management of the existing network.
Responsibilities of my department start when we receive the design from the engineering department and we start to look for the location, all the way to the construction and beginning of service of sites, which then are transferred to the responsibility of the Operations and Maintenance department.
TowerXchange: How would you define Entel Peru’s strategy in terms of towers? How much do you employ infrastructure sharing in your business?
Fernando García Álvarez, Gerente de Construcción e Infraestructura de Red, Entel Perú:
Entel Peru has a strategy of its own with regards to site deployment compared to Chile. Entel Chile is a leading company in its market with more than 5,000 sites. While in Peru we are dealing with competitors with years of experience in the country and a network with over 3,000 sites. Entel acquired Nextel Peru in 2013, a company that owned approximately 820 sites, and decided to grow aggressively since day one. We then decided to pursue densification opportunities via different channels. Firstly, we looked at the sites available for co-locations, then we decided to build new sites both through build-to-suit (BTS) partners and via in-house resources.
During the first year, in addition to modernising the existing network, we achieved the goal of increasing the points of presence from 820 to 1,580. In terms of BTS, we worked with infrastructure companies with a strong presence in the telecom market, paying our dues thanks to agreements that were re-negotiated when we stopped being a small outsider and started having a solid position in the sector, especially since our goal for our second year (2015) was to add 1,000 sites to our portfolio.
BTS firms in Peru operate all in different ways, there isn’t any uniformity in terms of their operations due to the different business volumes they handle. Some are small, others medium-sized or large, but since we had very challenging targets ahead, we decided to work with all of them and the process helped us understand that smaller firms work more flexibly and are more inclined to take risks.
Eventually, Entel Peru reached the goal of adding 1,000 sites to its portfolio in 2015, an aggressive growth that no one had ever achieved before in the country. The result was positive not only for ourselves but for the market as a whole.
We have been a disruptive force, enhancing competition in the field, offering work to many companies and most of all people in the country, changing lives and strengthening communication networks.
On the other hand, our deployment campaign attracted the attention of towercos that had never operated in the country before and decided to enter Peru with the idea to get business from us and the other MNOs. However, these companies don’t know Peru, its dynamics, laws and people, so for us, they can hardly add any value since selecting a partner means finding someone who can do more than just build a certain number of towers.
TowerXchange: Practically speaking, what’s in it for a towerco to work with Entel Peru? And what’s in it for you to work with a towerco?
Fernando García Álvarez, Gerente de Construcción e Infraestructura de Red, Entel Perú:
At Entel Peru, we are looking for partners who can add value, differentiate their offering and minimise - or share - the risks related to new projects. Having a contract with Entel does not guarantee search rings, if you haven’t demonstrated the ability to do things differently or better than others. This has nothing to do with how much you are ready to invest, but with putting yourself in our shoes and believing in our growth plans.
At the beginning, we didn’t know anyone in Peru. We started from zero and learnt all the dynamics of the country thanks to a relentless daily job, which sometimes was really hard. But since the first day we knew we needed committed partners, very aware of the market and ready to innovate.
In-building solutions (IBS) are something missing in the market. Very rarely we’ve received practical solutions to our indoor problems that met our expectations. It seems that towercos prefer to focus on macro sites, and don’t really want to take any unnecessary risks, but we don’t work like that.
If we have the capacity to deploy an IBS project on our own, why should we outsource it to a third party? Personally, I think that the only answer is because the third party adds value to what I am planning to develop. Because that party knows something more than me, holds contracts with strategic sites for an operator or simply because they are able to do it better than us or at a more competitive price.
Working with towercos has several positive aspects. We would have never obtained the outstanding results we achieved over the past few years if it wasn’t for the partner companies that worked with us. I am talking about companies who know the territory inside out and are able to obtain all the necessary municipal permits and licenses. In various cases, we’ve developed very good relationships with allies who worked on our deployment plans as their own and supported us in the past. However, we are now looking beyond that.
Towercos often tend to work with a short term mindset, only thinking about what business is going to come in next month or next year, and they often wait for us to get in touch with our requirements. Whereas we ask them to tell us what they can do for Entel Peru, and often have to push them to make us an offer rather than the other way around.
TowerXchange: Now that many towers are being built by towercos, how do you convince them to build a tower that is likely to remain single-tenant for some time in the future?
Fernando García Álvarez, Gerente de Construcción e Infraestructura de Red, Entel Perú:
The only way to convince a towerco to build towers that are not too commercially attractive and that might have a single tenant for a while is to assign a varied portfolio of sites to deploy. We always try to balance projects between urban and rural.
We are an operator who got to the market seven years after its competitors with an aggressive deployment plan and revolutionising the market ten years after its opening, with a highly competitive offer and robust infrastructure, and although our partners might not realise it at the beginning but to date, most of our sites are indeed apt for co-locations.
TowerXchange: Some operators at a global level are putting in place active network sharing plans. Do you think this strategy could be implemented in Peru in the future?
Fernando García Álvarez, Gerente de Construcción e Infraestructura de Red, Entel Perú:
I think that network sharing could very well be a reality in Peru but not in the near future. For MNOs to agree on terms it’ll be complicated but I do see it as a possibility and even a necessity in the future, depending on the availability of new spectrum.
TowerXchange: What’s the status of the grid in Peru?
Fernando García Álvarez, Gerente de Construcción e Infraestructura de Red, Entel Perú:
In urban environments, the state of the grid is good. However, this is indeed a problem to solve in rural areas and we are looking at various solutions and we are already implementing hybrid solutions in areas without access to energy. And this is yet another aspect where infrastructure companies should be more innovative.
TowerXchange: What can you tell us about the level of competition among operators in Peru? Which effects did Entel’s entrance have in the country?
Fernando García Álvarez, Gerente de Construcción e Infraestructura de Red, Entel Perú:
As a new entrant, I think we had an interesting impact on competition and generated some new dynamics in the market, changing its conditions in both the post and prepaid segments. Whenever you have an innovative new competitor, the other players have to respond so as not to fall behind and lose market share.
Peru is a very competitive market in terms of offers in the mobile sector and we always have to think about new packages and solutions for our subscribers. We are satisfied with what we’ve achieved to date, but we won’t settle for what we have and keep developing new projects.
I think that our participation in the TowerXchange Meetup was quite disruptive and brought to us good results to date. At the moment, we work with various new towercos that understood what we were looking for and made valuable offers to us
TowerXchange: Since your participation at the TowerXchange Meetup Americas, what has changed in your relationship with towercos?
Fernando García Álvarez, Gerente de Construcción e Infraestructura de Red, Entel Perú:
I think that our participation in the TowerXchange Meetup Americas was quite disruptive and brought to us good results to date. At the moment, we work with various new towercos that understood what we were looking for and made valuable offers to us.
We’ve developed the first small cells project with a towerco and our first IBS with an infrastructure company. Moreover, we’ve been certified with ISO 9001:2008 thanks to which all our processes are now standardised and meet the highest quality standards. Today we count on a team highly committed to our goals, a bi-annual deployment plan and suppliers who understand what we do and where we are going. It wasn’t easy, but if we look back we are very proud of what we’ve achieved and we are hungry for new challenges.
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